Prospective homebuyers were in for some of the worst market conditions imaginable last week, according to a report from Redfin.
The number of homes on the market hit a historic low during the week ending Nov. 28, Redfin reported: fewer than 539,000 active listings, a 26 percent year-over-year decline. The previous low point this year was in February, when about 577,000 homes were for sale.
For the four-week period ending Nov. 28, active listings declined 23 percent from 2020 and 42 percent from 2019.
With demand still strong and supply low, house prices rose. The first four weeks of November resulted in a record median sale price of $360,375, surpassing the July 25 mark of $359,637. The median sale price represents a 14 percent increase year-over-year from 2020, when it was $316,000, and a 1.5 percent gain from the previous month.
Sellers are aware that the housing market is working in their favor. Asking prices for newly-listed homes in the four-week period were up 12 percent from 2020 and 27 percent from 2019.
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The new month could bring even more bad news for prospective buyers.
“The number of homes for sale typically declines another 15 percent in December,” stated Redfin’s chief economist, Daryl Fairweather. “That means that by the end of the year, there will likely be 100,000 fewer homes for sale than there were in February when housing supply last hit rock bottom.”
Buyers also have the misfortune of needing to make one of the biggest decisions of their lives very quickly. In the first four weeks of November, a third of homes found buyers after being on the market for a week or less.
In the four-week period, homes were on the market for a median of 25 days. In 2020, the median was 31 days; in 2019, it was 45 days. Pending home sales were up 8 percent year-over-year and a whopping 49 percent from 2019 in the four-week timeframe.
Buyers with the ability to wait may find conditions more forgiving in the new year, although the uncertainty surrounding coronavirus and its omicron variant clouds the picture.
“I think more new listings will hit the market in the new year, but there will also be a long line of buyers who are queuing up right now,” Fairweather stated.
Buyers can also take heart in the latest S&P CoreLogic Case-Shiller U.S. National Home Price Index. While it showed U.S. home prices increased 19.5 percent year-over-year in September, there was also evidence that the monthly growth in housing prices is flattening out.